EXHIBIT 4.1
GEORGIA GULF CORPORATION
AMENDED AND RESTATED
RIGHTS AGREEMENT
TABLE OF CONTENTS
PAGE
Section 1. CERTAIN DEFINITIONS.................................................................2
Section 2.APPOINTMENT OF RIGHTS AGENT..........................................................6
Section 3.ISSUE OF RIGHT CERTIFICATES..........................................................6
Section 4.FORM OF RIGHT CERTIFICATES...........................................................8
Section 5.COUNTERSIGNATURE AND REGISTRATION....................................................8
Section 6.TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED,
DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES...................................................9
Section 7.EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.......................10
Section 8.CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES..................................12
Section 9.RESERVATION AND AVAILABILITY OF PREFERRED SHARES....................................12
Section 10.PREFERRED SHARES RECORD DATE.......................................................15
Section 11.ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.................16
Section 12.CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.........................30
Section 13.CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER...............31
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES...........................................33
Section 15.RIGHTS OF ACTION...................................................................35
Section 16.AGREEMENT OF RIGHT HOLDER..........................................................36
Section 17.RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER..................................37
Section 18.CONCERNING THE RIGHTS AGENT........................................................37
Section 19.MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT..........................38
Section 20.DUTIES OF RIGHTS AGENT.............................................................39
Section 21. CHANGE OF RIGHTS AGENT............................................................41
Section 22.ISSUANCE OF NEW RIGHT CERTIFICATES.................................................43
Section 23.REDEMPTION.........................................................................44
Section 24.NOTICE OF CERTAIN EVENTS...........................................................45
Section 25.NOTICES............................................................................46
Section 26.SUPPLEMENTS AND AMENDMENTS.........................................................47
Section 27.SUCCESSORS.........................................................................48
Section 28.BENEFITS OF THIS AGREEMENT.........................................................48
Section 29.SEVERABILITY.......................................................................48
Section 30.GOVERNING LAW......................................................................48
Section 31.COUNTERPARTS.......................................................................48
Section 32.DESCRIPTIVE HEADINGS...............................................................48
Section 33.CALENDAR DAYS......................................................................49
AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement, effective as of December 5,
2000 (this "Agreement"), is made and entered into by and between GEORGIA GULF
CORPORATION, a Delaware corporation (the "Company"), and EQUISERVE TRUST
COMPANY, N.A., as rights agent (the "Rights Agent").
WHEREAS, on April 27, 1990, the Board of Directors of the Company
authorized and declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as hereinafter defined) of the Company
outstanding as of the Close of business on May 8, 1990 (the "Record Date"), each
Right initially representing the right to purchase one one-hundredth of a share
of Junior Participating Preferred Stock, $0.01 par value, of the Company having
certain rights and preferences, and further authorized the issuance of one Right
with respect to each Common Share that shall become outstanding following the
Record Date but prior to the earlier of the Distribution Date and the Expiration
Date (as such terms are defined herein), and entered into that certain Rights
Agreement entered into between the Company and Wachovia Bank and Trust Company,
N.A. (predecessor in interest to EquiServe Trust Company), as rights agent,
dated as of April 27, 1990 (the "Original Agreement"));
WHEREAS, on or before August 31, 1990, the Board of Directors of the
Company authorized and directed, pursuant to and consistent with the provisions
of Section 26 hereof, that the Original Agreement be amended and restated in its
entirety;
WHEREAS, on April 27, 2000, the Board of Directors of the Company
further amended the Original Agreement to change the Final Expiration Date of
the Rights from April 27, 2000 to April 27, 2010;
WHEREAS, the parties hereto desire to enter into this Agreement in order
to further amend, restate and supersede the Original Agreement;
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NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree that this Agreement shall
amend, restate and supersede the Original Agreement, all as provided for herein
and set forth below.
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) that or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, is the Beneficial Owner
(as such term is hereinafter defined) of 15% or more of the Common Shares of the
Company then outstanding, but shall not include the Company, any Subsidiary (as
such term is hereinafter defined) of the Company, any employee benefit plan of
the Company or any wholly owned Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan, PROVIDED, HOWEVER,
that a Person will not be deemed to have become an "Acquiring Person" solely as
the result of (i) a reduction in the number of Common Shares outstanding, or
(ii) the consummation of the transactions contemplated by the Plan of
Recapitalization, dated as of January 15, 1990, as amended (the "Plan of
Recapitalization"); PROVIDED, HOWEVER, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding solely by reason of a reduction in the number of Common Shares
outstanding or the consummation of the Plan of Recapitalization and shall, after
such reduction in the number of Common Shares outstanding or such consummation
of the Plan of Recapitalization, (i) become the Beneficial Owner of any
additional Common Shares of the Company other than as a result of stock split,
stock dividend or similar transaction effected by the Company in which all
holders of Common Stock are treated equally or (ii) any other Person that is the
Beneficial Owner of Common Shares representing 1% or more of the
then-outstanding Common Shares thereafter
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becomes an Affiliate or Associate of such Person, then such Person shall be
deemed to become an "Acquiring Person". Notwithstanding the foregoing, if the
Board of the Company determines in good faith that a Person that would otherwise
be an "Acquiring Person" as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement, PROVIDED, HOWEVER, that a
Person will not be deemed to be the Affiliate or Associate of another Person
solely because either or both Persons are or were Directors of the Company.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) (A) the beneficial ownership of which such Person or
any of such Person's Affiliates or Associates, directly or indirectly,
has the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options,
or otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or
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on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has or shares the right to vote or
dispose of, including pursuant to any agreement, arrangement or
understanding; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to and
in accordance with, the applicable rules and regulations of the Exchange
Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to Section l(c)(ii)(B)) or
disposing of any securities of the Company; PROVIDED, HOWEVER, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security solely by virtue of any agreement, arrangement,
understanding or mutual intention with respect to the Plan of
Recapitalization and/or the Stock Election (as provided for therein).
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of Massachusetts
are authorized or obligated by law or executive order to close.
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(e) "Close of business" on any given date shall mean 5:00 P.M.,
Massachusetts time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., Massachusetts time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean shares of Common Stock, $0.01 par value, of the Company. "Common Shares"
when used with reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest aggregate voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.
(g) "Expiration Date" shall mean the earliest of (i) the Close of
business on the Final Expiration Date, (ii) the time at which the Rights are
redeemed as provided in Section 23, and (iii) the time at which all exercisable
Rights are exchanged as provided in Section 11(a)(iv).
(h) "Final Expiration Date" shall mean April 27, 2010.
(i) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(j) "Preferred Shares" shall mean shares of Junior Participating
Preferred Stock, $0.01 par value, of the Company having the rights and
preferences set forth on EXHIBIT A.
(k) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company (by press release, filing made with the Securities
and Exchange Commission or otherwise) that an Acquiring Person has become such.
(l) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
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Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time act as co-Rights Agent or appoint such co-Rights Agents as it
may deem necessary or desirable upon ten (10) days' prior written notice to
the Rights Agent. The Rights Agent shall have no duty to supervise, and in no
event be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the Close of business on the tenth
day following the Shares Acquisition Date or (ii) the Close of business on the
tenth business day (or, unless the Distribution Date, as hereinafter defined,
shall have previously occurred, such later date as may be specified by the Board
of Directors of the Company) after the date of the commencement of a tender or
exchange offer by any Person (other than the Company, any wholly owned
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan) if, upon consummation thereof such Person would
beneficially own 15% or more of the then-outstanding Common Shares (the earlier
of such dates being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for Common Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the Rights will be
transferable only in connection with the transfer of Common Shares and (z) the
surrender for transfer of any certificate evidencing Common Shares in respect of
which Rights have been issued will also constitute the transfer of the Rights
associated with the Common Shares evidenced by such certificates. As soon as
practicable after the Distribution Date, the Rights Agent will send, by
first-class, insured, postage-prepaid mail, to
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each record holder of Common Shares as of the Close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of EXHIBIT B hereto (a
"Right Certificate"), evidencing one Right for each Common Share so held,
subject to adjustment as provided herein. As of and following the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) With respect to certificates for Common Shares outstanding as
of the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates registered in the names of the holders thereof. Until the
earlier of the Distribution Date and the Expiration Date, the surrender for
transfer of any certificate for Common Shares outstanding as of the Record Date,
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates for Common Shares issued after the Record Date
but prior to the earlier of the Distribution Date and the Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in an Amended and Restated Rights
Agreement between Georgia Gulf Corporation and EquiServe Trust
Company, N.A., dated as of December 5, 2000 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
executive offices of Georgia Gulf Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
may be redeemed, may be exchanged, may expire, may be amended, or
may be evidenced by separate certificates and no longer be
evidenced by this Certificate. Georgia Gulf Corporation will mail
to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, Rights that are or were beneficially owned
by an Acquiring Person or any Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement) may become null and void.
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Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election and of assignment to be printed on the reverse thereof) shall
be substantially the same as EXHIBIT B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 22
hereof, the Right Certificates, whenever issued, on their face shall entitle the
holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the Purchase Price (as defined in Section
7(b)), but the number and kind of securities issuable upon exercise thereof and
the Purchase Price shall be subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President or any Vice President, and by the Secretary, an Assistant Secretary,
Treasurer or an Assistant Treasurer of the Company, either manually or by
facsimile signature, and have affixed thereto the Company's seal or a facsimile
thereof. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the
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execution of such Right Certificate, is a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal offices, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its fa'ce by each of the Right Certificates and
the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of Section 14 hereof, at any time after the Close of
business on the Distribution Date, and at or prior to the Expiration Date, any
Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a Preferred
Share as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
principal office of the Rights Agent in Winston-Salem, North Carolina. Thereupon
the Rights Agent shall countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
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(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make, execute and deliver a
new Right Certificate of like tenor to the Rights Agent, and the Rights Agent
will countersign and deliver such new Right Certificate to the registered owner
in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date and prior to the Expiration Date
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent in Winston-Salem, North Carolina or such other office
or offices designated for such purpose, together with payment of the Purchase
Price for the total number of securities as to which the Rights are exercised.
(b) The Purchase Price for each one one-hundredth of a Preferred
Share pursuant to the exercise of a Right shall be $90.00 and shall be subject
to adjustment from time to time as provided in this Agreement. The Purchase
Price shall be payable in cash, in lawful money of the United States of America
by certified check or bank draft payable to the order of the Company.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price
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for the shares to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in accordance
with Section 9 in cash, or by certified check or cashier's check payable to the
order of the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares certificates for the
number of one one-hundredths of a Preferred Share to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to be
purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such names or names as may be
designated by such holder, (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate, and (v) when appropriate, deliver any due xxxx or other instrument
provided to the Rights Agent by the Company for delivery to the registered
holder of such Rights Certificate as provided by Section 11(l).
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
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(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will be obligated to undertake any
action with respect to any purported transfer, split up, combination or exchange
of any Right Certificate pursuant to Section 6 or exercise of a Right
Certificate as set forth in this Section 7 unless the registered holder of such
Right Certificate has (i) completed and signed the certificate following the
form of assignment or the form of election to purchase, as applicable, set forth
on the reverse side of the Right Certificate surrendered for such transfer,
split up, combination, exchange or exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company may reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares or any Preferred
Shares held in its treasury, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding Rights.
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(b) So long as the Preferred Shares (and, following the
occurrence of a Section 11(a)(ii) event, Common Shares or other securities)
occurrence of an event issuable upon the exercise of Rights may be listed on any
national securities exchange or quoted on NASDAQ, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange, or quoted on
NASDAQ, upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (and, following
the occurrence of a Section 11(a)(ii) event, Common Shares or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such securities (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable
securities.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any securities upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or the issuance or delivery of certificates for the Preferred Shares in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for Preferred Shares upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
(e) The Company covenants and agrees that it shall use its best
efforts (i) to file on an appropriate form, as soon as practicable following the
later of the Shares Acquisition
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Date or the Distribution Date, a registration statement under the Securities Act
with respect to the securities purchasable upon exercise of the Rights, (ii) to
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company shall
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time after the date set forth in clause (i) of the first sentence of this
paragraph, the exercisability of the Rights in order to prepare and file such
registration statement and to permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement should be filed
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights in each relevant
jurisdiction until such time as a registration statement has been declared
effective and, upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding anything in this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the requisite
registration or quadification in such jurisdiction shall not have been effected
or the exercise of the Rights shall not be permitted under applicable law.
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(f) Notwithstanding anything in this Agreement to the contrary,
after the later of the Share Acquisition Date and the Distribution Date it will
not take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will eliminate or
otherwise diminish the benefits intended to be afforded by the Rights.
(g) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Section 11, 13 or 14 it
will make all arrangements necessary so that such other securities and/or cash
are available for distribution by the Rights Agent, if and when appropriate.
Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares (or Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; PROVIDED,
HOWEVER, that if the date of such surrender and payment is a date upon which the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding business day on which the Preferred Shares (or Common Shares
and/or other securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a holder of Preferred
Shares (or Common Shares and/or other securities, as the case may be) for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any
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preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of securities issuable upon
exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred
Shares payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares into a
smaller number of Preferred Shares or (D) issue any shares of its
capital stock in a reclassification of the Preferred Shares (including
any such reclassification in connection with a consolidation, merger or
share exchange in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such date and at a
time when the Preferred Shares transfer books of the Company were open,
he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification;
PROVIDED, HOWEVER, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one
Right. If an event occurs which
16
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) or Section 13, the adjustment provided for in this Section
11(a)(i) will be in addition to, and will be made prior to, any
adjustment required pursuant to Section 11(a)(ii) or Section 13.
(ii) In the event any Person shall become an Acquiring
Person, from and after the latest of the Distribution Date, the Shares
Acquisition Date and the time at which a Person became an Acquiring
Person, proper provision shall be made so that each holder of a Right
(except as otherwise provided below) shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to
the date of the occurrence of such Section 11(a)(ii) event (or, if any
other Section 11(a)(ii) event shall have previously occurred, the
product of the then-current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the date of the first occurrence of a
Section 11(a)(ii) event), in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to
the date of the occurrence of such Section 11(a)(ii) event (or, if any
other Section 11(a)(ii) event shall have previously occurred, the
product of the then-current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the date of the first occurrence of a
Section 11(a)(ii) event), exercisable and dividing that product by (y)
50% of the then current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of the event
17
described in this sentence; PROVIDED, HOWEVER, that no Right may be
exercised as provided in this Section 11(a)(ii) during such time as the
Rights continue to be redeemable pursuant to Section 23 hereof. In the
event that any Person shall become an Acquiring Person and the Rights
shall then be outstanding, the Company shall not take any action which
would eliminate or diminish the benefits intended to be afforded by the
Rights. Notwithstanding anything in this Agreement to the contrary, from
and after the time at which any Person becomes an Acquiring Person, any
Rights that are beneficially owned by (A) any Acquiring Person (or any
Affiliate or Associate of any Acquiring Person), (B) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who becomes a
transferee after the time any Person becomes an Acquiring Person, or (C)
a transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently with any
Person becoming an Acquiring Person pursuant to either (1) a transfer
from an Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (2) a transfer which
the Directors of the Company have determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding
the provisions of this Section 11(a)(ii), and subsequent transferees of
any of such Persons, will be void without any further action and any
holder of such Rights will thereafter have no rights whatsoever with
respect to such Rights under any provision of this Agreement.
No Right Certificate shall be issued pursuant to Section 3
that represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate
or Affiliate thereof; no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person whose
18
Rights would be void pursuant to the preceding sentence or any Associate
or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be canceled. Upon the
occurrence of an event described in Section 13(a), any Rights that shall
not have been previously exercised pursuant to this Section 11(a)(ii)
shall thereafter be exercisable only pursuant to Section 13 and not
pursuant to this Section 11(a)(ii).
(iii) If there shall not be sufficient Common Shares
authorized but unissued, or issued but not outstanding to permit the
issuance of all the Common Shares issuable in accordance with subsection
(ii) hereof upon the exercise of a Right, the Board of Directors of the
Company shall use its best efforts promptly to authorize and, subject to
the provisions of Section 9 hereof, make available for issuance
additional Common Shares or other equity securities of the Company
having equivalent voting rights and an equivalent value (as determined
in good faith by the Board of Directors of the Company) to the Common
Shares (for purposes of this Section 11(a)(iii), "equivalent common
shares"). In the event that equivalent common shares are so authorized,
upon the exercise of a Right in accordance with the provisions of
Section 7 hereof, the registered holder shall be entitled to receive (A)
Common Shares, to the extent any are available and (B) a number of
equivalent common shares, which the Board of Directors of the Company
shall have determined in good faith to have a value equivalent to the
difference between (x) the aggregate current per share market value of
all the Common Shares issuable in accordance with subsection (ii) hereof
upon the exercise of a Right (the "Exercise Value") and (y) the
aggregate current per share market value of any Common Shares available
for issuance upon the exercise of such Right; PROVIDED, HOWEVER, that if
at any time after 90
19
calendar days after the latest of the Distribution Date, the Shares
Acquisition Date and the time at which any Person becomes an Acquiring
Person, there shall not be sufficient Common Shares and/or equivalent
common shares available for issuance upon the exercise of a Right, then
the Company shall be obligated to deliver, upon the surrender of such
Right and without requiring payment of the Purchase Price, Common Shares
(to the extent available), equivalent common shares (to the extent
available) and then cash (to the extent permitted by applicable law and
any agreements or instruments to which the Company is a party in effect
immediately prior to such time), which securities and cash shall have an
aggregate value equal to the excess of (1) the Exercise Value over (2)
the product of the Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the date of the occurrence of the most recent
Section 11(a)(ii) event (or, if any other Section 11(a)(ii) event shall
have previously occurred, the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for
which a Right would have been exercisable immediately prior to the date
of the occurrence of such Section 11(a)(ii) event if no other Section
11(a)(ii) event had previously occurred). To the extent that any legal
or contractual restrictions prevent the Company from paying the full
amount of cash payable in accordance with the foregoing sentence, the
Company shall pay to holders of the Rights as to which such payments are
being made all amounts which are not then restricted on a pro rata basis
and shall continue to make payments on a pro rata basis as funds become
available until the full amount due to each such Rights holder has been
paid.
(iv) The Board of Directors of the Company may, at its
option, at any time after the later of the Distribution Date or the
Shares Acquisition Date exchange all or
20
part of the then-outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the Record
Date (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), who or which,
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the exchange of any Rights
pursuant to the first paragraph of this Section 11(a)(iv), and without
any further action and without any notice, the right to exercise such
Rights shall terminate and the only right with respect to such Rights
thereafter of the holder of such Rights shall be to receive that number
of Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. Promptly after the effectiveness of
the action of the Board of Directors of the Company ordering the
exchange of any Rights pursuant to the first paragraph of this Section
11(a)(iv), the Company shall publicly announce such action, and within
10 calendar days thereafter shall give notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner
herein
21
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of Common Shares for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
In any exchange pursuant to this Section 11(a)(iv), the
Company, at its option, may substitute for any Common Share exchangeable
for a Right, (I) equivalent common shares (as such term is used in
Section 11(a)(iii) hereof), (ii) cash, (iii) debt securities of the
Company, (iv) other assets, or (v) any combination of the foregoing, in
any event having an aggregate value which the Board of Directors of the
Company shall have determined in good faith to be equal to the current
per share market price of one Common Share (determined pursuant to
Section 11(d) hereof) on the Trading Day immediately preceding the date
of exchange pursuant to this Section 11(a)(iv).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred
Shares or equivalent preferred shares) less than the current per share
market price of the Preferred Shares (as defined in Section 11(d)) on
such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying
22
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares
which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current market price and the
denominator of which shall be the number of Preferred Shares outstanding
on such record date plus the number of additional Preferred Shares
and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); in case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash,
the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. Preferred Shares
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in
the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend payable in Preferred
Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date shall
be determined by
23
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current per share market
price of the Preferred Shares (as defined in Section 11(d)) on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares on any date shall
be deemed to be the average of the daily closing prices per share of
such Common Shares for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER,
that in the event that the current per share market price of the Common
Shares is determined during a period following the announcement by the
issuer of such Common Shares of a dividend or distribution on such
Common Shares payable in such Common Shares or securities convertible
into such Common Shares (other than the Rights) or (B) any subdivision,
combination or reclassification of such Common Shares, and prior to the
expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
current market price shall be appropriately adjusted to reflect the
current market price per Common Share equivalent. The closing price for
each day shall be the last sale price, regular way, or, in case no such
24
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Common Shares are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Common Shares are listed or
admitted to trading or, if the Common Shares are not listed or admitted
to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or
such other system then in use, or, if on any such date the Common Shares
are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a
market in the Common Shares selected by the Board of Directors of the
Company. If the Common Shares are not publicly held or not so listed or
traded, or are not the subject of available bid and asked quotes,
"current per share market price" will mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the Rights
Agent. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the
Common Shares are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on
which banking institutions in the State of New York are not authorized
or obligated by law or executive order to close.
25
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in the same manner as set forth above for Common Shares in
clause (i) of this Section 11(d). If the current per share market price
of the Preferred Shares cannot be determined in the manner provided
above, the "current per share market price" of one one-hundredth of a
Preferred Share shall be conclusively deemed to be the current per share
market price of one Common share (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the
date hereof). If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, "current per share market price"
shall mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a
Common Share or other share or ten-thousandth of a Preferred Share, as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so
26
receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price per one one-hundredth of a
Preferred Share, that number of one one-hundredths of a Preferred Share (cal-
culated to then nearest ten-thousandth of a Preferred Share) obtained by (i)
multiplying (x) the number of shares covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the
27
number of Rights shall become that number of Rights (calculated to the nearest
one ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Right Certificates issued hereunder.
28
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredths of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(1) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any of Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in subsection (b) of this Section 11, hereafter
made by the Company to holders of its Preferred Shares shall not be taxable to
such shareholders.
29
(n) In the event that at any time after the Record Date and prior
to the Distribution Date, the Company shall (i) declare or pay any dividend on
the Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case (i) the number of one
one-hundredths of a Preferred Share purchasable upon proper exercise of each
Right shall be determined by multiplying the number of shares so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event and (ii) each Common Share outstanding immediately after such
event shall have issued with respect to it that number of Rights which each
common share outstanding immediately prior to such event had issued with respect
to it. The adjustments provided for in this Section 11(n) shall be made
successively whenever such.a dividend is declared or paid or such a subdivision,
combination or consolidation is effected. If an event occurs which would require
an adjustment under Section 11(a)(ii) and this Section 11(n), the adjustments
provided for in this Section 11(n) shall be in addition and Prior to any
adjustment required pursuant to Section
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares
and the Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof.
30
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. In the event, directly or indirectly, that at any time after a
Person has become an Acquiring Person (a) the Company shall consolidate with, or
merge with and into, any other Person (other than any employee benefit plan of'
the Company, or any entity holding Common Shares for or pursuant to the terms of
any such plan), (b) any Person (other than any employee benefit plan of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
such plan) shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving corporation of such
merger and, in connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to any other Person other than the Company or
one or more of its wholly owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof, in accordance with the terms of this Agreement, such number of
duly authorized, validly issued, fully paid, nonassessable and freely tradeable
Common Shares of such other Person (including the Company as successor thereto
or as the surviving corporation) as shall be equal to the result obtained by (X)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right is then exercisable (without taking into
account any adjustment previously made pursuant to Section 11(a)(ii)) and
dividing that product by (Y) 50% of the current per share market price of the
Common Shares of such other Person (determined pursuant to Section 11(d)) on the
date of consummation of such consolidation,
31
merger, sale or transfer; (ii) the issuer of such Common Shares shall thereafter
be liable for, and shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such steps (including, but not limited
to, the reservation of a sufficient number of its Common Shares to permit the
exercise of all outstanding Rights) in connection with such consummation as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common Shares
thereafter deliverable upon the exercise of the Rights. The Company shall not
enter into any transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights. The Company shall
not consummate any such consolidation, merger, sale or transfer unless prior
thereto the Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing and further providing that as
promptly as practicable after the consummation of any transaction of the kind
referred to in this Section 13, such issuer will:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use its
best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of the date the Rights are redeemed pursuant
to Section 23 hereof, the Final Expiration Date, or such time as there
shall no longer be any Rights outstanding;
32
(ii) take all such action as may be appropriate under, or
to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights; and
(iii) deliver to holders of the Rights historical
financial statements for the issuer and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10
under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or,
33
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company if on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as Beneficial Owners of the Preferred
Shares. In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one Preferred Share. For purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section 11(d))
for the Trading Day immediately prior to the date of such exercise.
34
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right.
(d) The Company shall not be required to issue fractions of
Common Shares or other securities issuable upon exercise or exchange of Rights
pursuant to section 11(a)(ii) or to distribute certificates which evidence any
such fractional securities. In lieu of issuing any such fractional securities,
the Company may pay to the registered holders of Rights certificates at the time
such Rights are exercised as herein provided in an amount in cash equal to the
same fraction of the current market value of one such security. For the purpose
of this Section 14(d), current per share market price of a Common Share or other
security issuable upon the exercise or exchange of Rights shall be the closing
price thereof (determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such exercise or
exchange.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of actions given to the Right Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit; enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific
35
performance of the obligations under, and injunctive relief against actual or
threatened violations of he obligations of any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent in Winston-Salem, North Carolina, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) The Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental
36
authority, prohibiting or otherwise restraining performance of such obligation;
PROVIDED, HOWEVER, that the Company shall use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised or exchanged for Common Shares in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
37
The Rights Agent shall be protected and shall incur no liability for, or
in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
38
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
39
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13 or 23, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
40
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instruc tions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common shares and Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days, notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and
41
to each transfer agent of the Common Shares and Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of Georgia (or of
any other state of the United States so long as such corporation is authorized
to do business as a banking institution in the State of Georgia), in good
standing, having a principal office in the State of Georgia, which is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
and Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for
42
in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement to the contrary, the Company may, at its
option, issue new Right Certificates evidencing Rights in such forms as may be
approved by its Board of Directors to reflect any adjustment or change in the
Purchase Price per share and the number or kind of securities issuable upon
exercise of the Rights made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale by the Company of Common
Shares following the Distribution Date and prior to the Expiration Date, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant to
the exercise or conversion of securities issued prior to the Distribution Date
which are exercisable for, or convertible into Common Shares, and (b) may, in
any other case, if deemed necessary, appropriate or desirable by the Board of
Directors of the Company, issue Right Certificates representing an equivalent
number of Rights as would have been issued in respect of such Common Shares if
they had been issued or sold prior to the Distribution Date, as appropriately
adjusted as provided herein as if they had been so issued or sold; PROVIDED,
HOWEVER, that (i) no such Right Certificate shall be issued if, and to the
extent that, in its good faith judgment the Board of Directors of the Company
shall have determined that the issuance of such Right Certificate could have a
material adverse tax consequence to the Company or to the Person to whom or
which such Right Certificate otherwise would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
otherwise shall have been made in lieu of the issuance thereof.
43
Section 23. REDEMPTION.
(a) Prior to the Final Expiration Date, the Board of Directors
may, at its option, at any time prior to the later of (x) the Distribution Date
or (y) the Shares Acquisition Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the Record Date (such redemption price being hereinafter
referred to as the "Redemption Price").
(b) Immediately upon the effectiveness of the action of the Board
of Directors ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Promptly after the effectiveness of the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Shares, PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice will not affect the
validity of the redemption of the Rights. Any notice that is mailed in the
manner herein provided will be deemed given, whether or not the holder receives
the notice. The Company may, at its option, combine the payment of the
Redemption Price with any other payment being made concurrently to holders of
Common Shares and, to the extent that any such other payment is discretionary,
may reduce the amount thereof on account of the concurrent payment of the
Redemption Price. If legal or contractual restrictions prevent the Company from
paying the Redemption Price (in the form of consideration deemed appropriate by
the Board of Directors) at
44
the time of redemption, the Company will pay the Redemption Price, without
interest, promptly after such time as the Company ceases to be so prevented from
paying the Redemption Price.
Section 24. NOTICE OF CERTAIN EVENTS. In case the Company after the
Distribution Date shall propose (a) to pay any dividend payable in stock of any
class to the holders of its Preferred Shares or to make any other distribution
to the holders of its Preferred Shares (other than a regular quarterly cash
dividend) or (b) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options, or (c)
to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), or (d) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its subsidiaries (taken as a
whole) to, any other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with Section 25 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (a) or (b) above at least 20 days prior
to the record date for determining holders of the Preferred Shares for purposes
of such action, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
45
In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to each holder of a Right Certificate, in accordance
with Section 25 h'ereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.
Section 25. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
000 Xxxxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address-is filed in.writing with the Company) as follows:
EquiServe Trust Company, N.A.
Xxxx Xxxxx Xxxxxx Xxxx
000 Xxxxxx Xxxxxx
Mail Stop 45-02-62
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
46
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the time the Rights
cease to be redeemable and subject to the last sentence of this Section 26, if
the Company so directs, the Company and the Rights Agent shall supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing Common Shares. From and after the time the Rights
cease to be redeemable and subject to the last sentence of this Section 26, if
the Company so directs, the Company and the Rights Agent shall supplement or
amend this Agreement without the approval of any holders of Right Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to supplement or amend the provisions hereunder in any manner which the
Company may deem desirable, including, without limitation, the addition of other
events requiring adjustment to the Rights under Sections 11 or 13 hereof or
procedures relating to the redemption of the Rights, which supplement or
amendment shall not, in the good faith determination of the Board of Directors
of the Company, adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Upon the delivery of a certificate from an officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute such
supplement or amendment; PROVIDED, HOWEVER, that the failure or refusal of the
Rights Agent to execute such supplement or amendment shall not affect the
validity of any supplement or amendment adopted by the Company, any of which
shall be effective in accordance with the terms thereof. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which decreases the stated Redemption Price or which modifies a
time period relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable.
47
Section 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 29. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 30. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 31. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 32. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
48
Section 33. CALENDAR DAYS. Unless otherwise specifically provided
herein, time periods measured in days pursuant to this Rights Agreement shall be
measured in calendar days.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[CORPORATE SEAL] GEORGIA GULF CORPORATION
Attest: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------ ------------------------------
Secretary Xxxxxxx X. Xxxxxxxx
Vice President -- CFO
[BANK SEAL] EQUISERVE TRUST COMPANY, N.A.
Attest: By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------ ------------------------------
Title Title: Managing Director
49
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF JUNIOR PARTICIPATING PREFERRED STOCK
of
GEORGIA GULF CORPORATION
Pursuant to Section 151 of the General Corporation Law of the
State of Delaware:
GEORGIA GULF CORPORATION, a Delaware corporation (the
"Corporation"), certifies that pursuant to the authority conferred upon its
Board of Directors by the Certificate of Incorporation, as amended, of the said
Corporation, the said Board of Directors on October 30, 1986 adopted the
following resolution creating a series of Fifteen Million (15,000,000) shares of
Preferred Stock designated as Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, as amended, the Board of Directors hereby creates a series of
Preferred Stock, $0.01 par value per share, of the Corporation and hereby states
the designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof (in addition to the provisions set forth in
the Restated Certificate of Incorporation of the Corporation, which are
applicable to the Preferred Stock of all classes and series) as follows:
I. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Junior Participating Preferred stock" (the "Preferred Stock") and
the number of shares constituting such series shall be 15,000,000. Such number
of shares may be increased or decreased by resolution of the Board of Directors;
PROVIDED, that no decrease shall reduce the number of shares of Preferred Stock
to a number less than that of the shares then outstanding.
II. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior
to the shares of Preferred Stock with respect to dividends, the holders
of shares of Preferred Stock, in preference to the holders of Common
Stock of the Corporation (the "Common Stock") and of any other junior
stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $0.01 or (b) subject to
the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends, and the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock, or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect
to the first
Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of
Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $0.01 per share on the Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date forthe determination of holders
of shares of Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Preferred Stock in an
amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
III. VOTING RIGHTS. The holders of shares of Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Preferred Stock shall entitle the holder thereof to
one vote on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares
A-2
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(C) Except as set forth herein, holders of Preferred Stock shall
have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
IV. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Preferred Stock as provided in Section II
are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Preferred Stock, except dividends paid ratably on the
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the 'total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding.up) with
the Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Preferred Stock;
or
(iv) purchase or otherwise acquire for consideration any
shares of Preferred Stock, or any shares of stock ranking on a
parity with the Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon
such terms as the Board of Directors, after consideration of the
respective
A-3
annual dividend rates and other relative rights and preferences
of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section IV purchase or otherwise acquire such
shares at such time and in such manner.
V. REACQUIRED SHARES. Any shares of Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject -to the conditions
and restrictions on issuance set forth herein.
VI. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Preferred Stock unless, prior
thereto, the holders of Shares of Preferred Stock shall have received $50.00 per
share, plus an amount equal to accrued and unpaid dividends and dis tributions
thereon, whether or not declared, to the date of such payment, provided that the
holders of shares of Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to the aggregate amount to be distributed per share to holders of Common
Stock, or (2) to the holders of stock ranking on a parity (either as to,
dividends or upon liquidation, dissolution or winding up) with the Preferred
Stock, except distributions made ratably on the Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Preferred Stock
were entitled immediately prior to such event under the proviso in clause (1) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
VII. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
A-4
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
VIII. NO REDEMPTION. The shares of Preferred Stock shall not be
redeemable.
IX. RANK. The Preferred Stock shall rank junior to all other
series of the Corporation's preferred stock outstanding as of October 31, 1986,
as to the payment of dividends and the distribution of assets.
X. AMENDMENT. The Restated Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Preferred Stock, voting together as a
single series.
IN WITNESS WHEREOF, GEORGIA GULF CORPORATION has caused this
Certificate of Designation, Preferences and Rights of Junior Participating
Preferred Stock to be duly executed by its President and attested to by its
Secretary and has caused its corporate seal to be affixed hereto, this ____ day
of _________________, 1986.
[CORPORATE SEAL] GEORGIA GULF CORPORATION
Attest: By:
------------------------------ ------------------------------
Secretary President
A-5
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ______________ Rights
NOT EXERCISABLE AFTER APRIL 27, 2010 (SUBJECT TO POSSIBLE
EXTENSION AT THE OPTION OF THE COMPANY) OR EARLIER IF REDEEMED,
EXCHANGED OR AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION,
EXCHANGE AND AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY BECOME NULL AND
VOID.
Right Certificate
GEORGIA GULF CORPORATION
This certifies that ____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement, dated as of December 5,
2000 (the "Rights Agreement") between Georgia Gulf Corporation, a Delaware
corporation (the "Company"), and EquiServe Trust Company, N.A. (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M. (New
York City time) on April 27, 2010 at the principal office of the Rights Agent in
Atlanta, Georgia, or at the office of its successors as Rights Agent, one
one-hundredth of a fully paid non-assessable share of Junior Participating
Preferred Stock, $0.01 par value (the "Preferred Shares"), of the Company, at a
purchase price of $90.00 per one one-hundredth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Right Certificate (and the number of
Preferred Shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of December 5, 2000, based on the Preferred Shares as constituted at
such date.
As provided in the Rights Agreement, the Purchase Price and the
number and the kind of securities issuable upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company in Atlanta, Georgia and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may, but are not required to, be redeemed by the
Company at a redemption price of $0.01 per Right.
B-2
No fractional Preferred Shares will be issued upon theexercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _____________________________.
[CORPORATE SEAL] GEORGIA GULF CORPORATION
Attest: By:
------------------------------ ------------------------------
Secretary President
Countersigned:
By:
---------------------------------
Authorized Signature
B-4
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificates.)
FOR VALUE RECEIVED ________________________________ hereby sells,
assigns and transfers, unto ____________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint, attorney, to transfer the within
Right Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ___________________, _____.
_____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
--------------------------------------------------------------------------------
(To be completed if applicable)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_____________________________
Signature
--------------------------------------------------------------------------------
[Form of reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the
Right Certificate.)
To: Georgia Gulf Corporation
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares be issued in the name of:
Please insert social security or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: _________________, _____
_____________________________
Signature
(Signature must conform in
all respects to name of
holder as specified on the
face of this Right
Certificate in every
particular, without
alteration or enlargement or
any change whatsoever)
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
--------------------------------------------------------------------------------
(To be completed if applicable)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
----------------------------
Signature
-------------------------------------------------------------------------------
NOTICE
The signatures in the foregoing Forms of Assignment and Election
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Forms of
Assignment and Election is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and, in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Rights Certificate.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On April 27, 1990, the Board of Directors of Georgia Gulf
Corporation (the "Company") declared a dividend distribution of one preferred
share purchase right (a "Right") for each outstanding share of common stock,
$0.01 par value (the "Common Shares"), of the Company. The distribution was
payable on May 8, 1990 (the "Record Date") to the shareholders of record as of
the close of business on that date. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of a Junior Participating
Preferred Stock, $0.01 par value, of the Company (the "Preferred Shares") at a
price of $90.00 per one one-hundredth of a Preferred Share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in an Amended and Restated Rights Agreement, dated as of December 5, 2000
(the "Rights Agreement") between the Company and EquiServe Trust Company, N.A.,
as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") acquired beneficial ownership of 15% or more of the
outstanding Common Shares or (ii) 10 days following the commencement or
announcement of an intention to make a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of such outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the Record
Date, by such Common Share certificates. The Rights Agreement provides that,
until the Distribution Date, the Rights will be transferred with and only with
the Common Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Share certificates issued after the Record
Date upon transfer or new issuance of the of the Common Shares will contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Shares will also constitute the transfer
of the Rights associated with the Common Shares represented by such
certificates. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on April 27, 2010 (the "Final Expiration Date"), unless
earlier redeemed or exchanged by the Company as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for Preferred Shares or convertible securities at less
than the current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash
dividends out of earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those referred to
above).
The number of one one-hundredths of a Preferred Share for which a
Right is exercisable and the number of Rights outstanding are also subject to
adjustment in the event of dividends on the Common Shares payable in Common
Shares or subdivisions, combinations or consolidations of the Common Shares,
occurring, in any such case, before the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will be
non-redeemable. Each Preferred Share will have a minimum preferential quarterly
dividend rate of $1.00 per share, but will be entitled to an aggregate dividend
of one one-hundredth the dividend declared on the Common Shares. In the event of
liquidation, the holders of the Preferred Shares will receive a preferential
liquidation payment equal to the greater of $1.00 or one one-hundredth the
payment made per Common Share. Each Preferred Share will have one one-hundredth
vote, voting together with the Common Shares. Finally, in the event of any
merger, consolidation or other transaction in which Common Shares are exchanged,
each Preferred Share will be entitled to receive one one-hundredth the amount
received per Common Share. These rights are protected by customary antidilution
provisions. Because of the nature of the Preferred Shares, dividend, liquidation
and voting rights, the value of one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper Provision shall be made so that each
holder of a Right, other than Rights that are or were owned beneficially by the
Acquiring Person (which thereafter will be void), will thereafter have the right
to receive, upon exercise thereof at the then current exercise price of the
Right, that number of Common Shares (or, under certain circumstances, an
economically equivalent security or securities of the Company) having a market
value of two times the exercise price of the Right.
In the event that (i) the Company merges with or into any person
and the Company is not the surviving corporation, (ii) any person merges with or
into the Company and the Company is the surviving corporation, but its Common
Shares are changed or exchanged, or (iii) 50% or more of the Company's assets or
earning power, including without limitation securities creating obligations of
the Company, are sold, proper provision shall be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock (or, under certain circumstances, an economically equivalent security or
securities) of such other person which at the time of such transaction would
have a market value of two times the exercise price of the Right.
At any time after the later of the Distribution Date and the
first occurrence of any of the events described in the immediately preceding two
paragraphs and prior to the acquisition by any person or group of affiliated or
associated persons of 50% or more of the outstanding Common Shares, the Board of
Directors of the Company may exchange the Rights (other than any Rights which
have become void), in whole or in part, at an exchange ratio of one Common Share
per Right (subject to adjustment).
C-2
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading date prior to the date
of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of the
outstanding Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right (the "Redemption
Price"). Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
The Rights Agreement may be amended by the Company without the
approval of any holders of Right Certificates, including amendments which add
other events requiring adjustment to the purchase price payable and the number
of Preferred Shares or other securities issuable upon the exercise of the Rights
or which modify procedures relating to the redemption of the Rights, provided
that no amendment may be made which decreases the stated Redemption Price or
which modifies a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights is as of December 5, 2000 and does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
C-3
